SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
Stock prices whiz by on a ticker near the Goldman Sachs booth on the floor of the New York Stock Exchange on April 16, 2010 in New York.
(Photo: Chris Hondros/Getty Images)
No, Says Consumer Watchdog, Goldman Sachs Shouldn't Be Allowed to Sell Electricity
"It is highly concerning to see a large Wall Street bank enter a market known for its lack of consumer protection."
Nov 01, 2023
Federal regulators should not allow Goldman Sachs to become the first Wall Street bank to sell retail electricity contracts to U.S. households, a campaigner with Public Citizen argued Wednesday.
"Competitive retail electricity suppliers solicit households to sign contracts to provide electricity, often door-to-door," said Tyson Slocum, director of the consumer watchdog's energy program, in a statement. "The industry is known to frequently employ unfair and deceptive marketing and sales tactics, disproportionately impacting low-income communities, communities of color, and the elderly."
"It is highly concerning to see a large Wall Street bank enter a market known for its lack of consumer protection," declared Slocum, who also dove into problems with the competitive retail electricity industry and a related application to the Federal Energy Regulatory Commission (FERC) in a short essay.
The essay cites reporting from The Wall Street Journal as well as findings from the National Consumer Law Center and the Massachusetts attorney general that the "predatory" sector engages in greenwashing and problematic marketing strategies while saddling vulnerable people with higher utility bills.
"Key to Goldman's ability to make money from selling retail electricity to households is having a sizable financial power trading business buoyed by control over generation."
Industry issues are so bad, the essay notes, that Public Citizen joined with other advocates earlier this year in calling on the Federal Trade Commission to better protect consumer from misleading claims associated with home energy products.
Goldman Sachs is attempting to enter this troubling industry through a private equity firm that last month sought permission from FERC to make sales on behalf of Rhythm Energy—which, according to the application, is "a retail electric provider currently operating in Texas that is seeking to expand its business."
Slocum stressed Wednesday that "lawmakers have attempted to build a firewall between banks owning and controlling nonbank businesses. While Goldman is playing a game with shell corporations, there are very clear connections between Goldman Sachs, private equity firm West Street Capital Partners, and Rhythm Energy."
His essay details a "rent-a-director" scheme for shell companies and states that "Goldman Sachs—a bank holding company subject to regulatory oversight by the Federal Reserve—controls this private equity firm and is able to direct its holdings like Rhythm Energy despite the apparent conflict" with federal law.
"Key to Goldman's ability to make money from selling retail electricity to households is having a sizable financial power trading business buoyed by control over generation," the essay explains. "On October 24, FERC approved allowing Goldman Sachs to control GenOn's fleet of fossil fuel power plants out of bankruptcy (Avenue Capital Group, Prudential Financial, Graham Goldsmith's Cross Ocean, and Stone Point Capital-managed Trident Capital are the other firms controlling it along with Goldman)."
"While this push into selling retail electricity contracts to households appears to be the first by a Wall Street bank," the essay says, there are other examples from private equity firms and fossil fuel giants which show how "aligning control over wholesale markets with locking consumers into retail contracts can be lucrative."
The essay concludes that "Goldman Sachs clearly sees profits to be made selling American families electricity. The question is why the Federal Reserve is allowing Goldman Sachs to be in the business of marketing electricity to households."
As Slocum warned Wednesday, "Controlling both energy generation and building out a network of households that are contractually obligated to buy your energy is ripe for consumer abuse."
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
federal reserveconsumer protectionfederal energy regulatory commissionpublic citizenwall streetgoldman sachs
Federal regulators should not allow Goldman Sachs to become the first Wall Street bank to sell retail electricity contracts to U.S. households, a campaigner with Public Citizen argued Wednesday.
"Competitive retail electricity suppliers solicit households to sign contracts to provide electricity, often door-to-door," said Tyson Slocum, director of the consumer watchdog's energy program, in a statement. "The industry is known to frequently employ unfair and deceptive marketing and sales tactics, disproportionately impacting low-income communities, communities of color, and the elderly."
"It is highly concerning to see a large Wall Street bank enter a market known for its lack of consumer protection," declared Slocum, who also dove into problems with the competitive retail electricity industry and a related application to the Federal Energy Regulatory Commission (FERC) in a short essay.
The essay cites reporting from The Wall Street Journal as well as findings from the National Consumer Law Center and the Massachusetts attorney general that the "predatory" sector engages in greenwashing and problematic marketing strategies while saddling vulnerable people with higher utility bills.
"Key to Goldman's ability to make money from selling retail electricity to households is having a sizable financial power trading business buoyed by control over generation."
Industry issues are so bad, the essay notes, that Public Citizen joined with other advocates earlier this year in calling on the Federal Trade Commission to better protect consumer from misleading claims associated with home energy products.
Goldman Sachs is attempting to enter this troubling industry through a private equity firm that last month sought permission from FERC to make sales on behalf of Rhythm Energy—which, according to the application, is "a retail electric provider currently operating in Texas that is seeking to expand its business."
Slocum stressed Wednesday that "lawmakers have attempted to build a firewall between banks owning and controlling nonbank businesses. While Goldman is playing a game with shell corporations, there are very clear connections between Goldman Sachs, private equity firm West Street Capital Partners, and Rhythm Energy."
His essay details a "rent-a-director" scheme for shell companies and states that "Goldman Sachs—a bank holding company subject to regulatory oversight by the Federal Reserve—controls this private equity firm and is able to direct its holdings like Rhythm Energy despite the apparent conflict" with federal law.
"Key to Goldman's ability to make money from selling retail electricity to households is having a sizable financial power trading business buoyed by control over generation," the essay explains. "On October 24, FERC approved allowing Goldman Sachs to control GenOn's fleet of fossil fuel power plants out of bankruptcy (Avenue Capital Group, Prudential Financial, Graham Goldsmith's Cross Ocean, and Stone Point Capital-managed Trident Capital are the other firms controlling it along with Goldman)."
"While this push into selling retail electricity contracts to households appears to be the first by a Wall Street bank," the essay says, there are other examples from private equity firms and fossil fuel giants which show how "aligning control over wholesale markets with locking consumers into retail contracts can be lucrative."
The essay concludes that "Goldman Sachs clearly sees profits to be made selling American families electricity. The question is why the Federal Reserve is allowing Goldman Sachs to be in the business of marketing electricity to households."
As Slocum warned Wednesday, "Controlling both energy generation and building out a network of households that are contractually obligated to buy your energy is ripe for consumer abuse."
From Your Site Articles
Federal regulators should not allow Goldman Sachs to become the first Wall Street bank to sell retail electricity contracts to U.S. households, a campaigner with Public Citizen argued Wednesday.
"Competitive retail electricity suppliers solicit households to sign contracts to provide electricity, often door-to-door," said Tyson Slocum, director of the consumer watchdog's energy program, in a statement. "The industry is known to frequently employ unfair and deceptive marketing and sales tactics, disproportionately impacting low-income communities, communities of color, and the elderly."
"It is highly concerning to see a large Wall Street bank enter a market known for its lack of consumer protection," declared Slocum, who also dove into problems with the competitive retail electricity industry and a related application to the Federal Energy Regulatory Commission (FERC) in a short essay.
The essay cites reporting from The Wall Street Journal as well as findings from the National Consumer Law Center and the Massachusetts attorney general that the "predatory" sector engages in greenwashing and problematic marketing strategies while saddling vulnerable people with higher utility bills.
"Key to Goldman's ability to make money from selling retail electricity to households is having a sizable financial power trading business buoyed by control over generation."
Industry issues are so bad, the essay notes, that Public Citizen joined with other advocates earlier this year in calling on the Federal Trade Commission to better protect consumer from misleading claims associated with home energy products.
Goldman Sachs is attempting to enter this troubling industry through a private equity firm that last month sought permission from FERC to make sales on behalf of Rhythm Energy—which, according to the application, is "a retail electric provider currently operating in Texas that is seeking to expand its business."
Slocum stressed Wednesday that "lawmakers have attempted to build a firewall between banks owning and controlling nonbank businesses. While Goldman is playing a game with shell corporations, there are very clear connections between Goldman Sachs, private equity firm West Street Capital Partners, and Rhythm Energy."
His essay details a "rent-a-director" scheme for shell companies and states that "Goldman Sachs—a bank holding company subject to regulatory oversight by the Federal Reserve—controls this private equity firm and is able to direct its holdings like Rhythm Energy despite the apparent conflict" with federal law.
"Key to Goldman's ability to make money from selling retail electricity to households is having a sizable financial power trading business buoyed by control over generation," the essay explains. "On October 24, FERC approved allowing Goldman Sachs to control GenOn's fleet of fossil fuel power plants out of bankruptcy (Avenue Capital Group, Prudential Financial, Graham Goldsmith's Cross Ocean, and Stone Point Capital-managed Trident Capital are the other firms controlling it along with Goldman)."
"While this push into selling retail electricity contracts to households appears to be the first by a Wall Street bank," the essay says, there are other examples from private equity firms and fossil fuel giants which show how "aligning control over wholesale markets with locking consumers into retail contracts can be lucrative."
The essay concludes that "Goldman Sachs clearly sees profits to be made selling American families electricity. The question is why the Federal Reserve is allowing Goldman Sachs to be in the business of marketing electricity to households."
As Slocum warned Wednesday, "Controlling both energy generation and building out a network of households that are contractually obligated to buy your energy is ripe for consumer abuse."
From Your Site Articles
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.